The Prime Minister said that his cabinet had proposed a budget revision which fully met main strategic objectives: macroeconomic stability, a higher growth rate and better living standards.
According to Sanader, the Gross Domestic Product rose by six percent in the first quarter this year as against a 5.2-percent rise in the comparable period of 2005. The revenues increased by 11.4 percent, and the first quarter of 2006 saw the lowest unemployment rate in the last seven years.
Sanader said that what was the most important was the fact that the national budget deficit was halved from 4.3 billion kuna in the first six months of 2005 to 2.1 billion kuna in the same period of 2006.
The deficit is going around three percent currently, while it was projected to account for 3.3 percent of GDP. In this way, Croatia has already met an important economic criterion of the European Monetary Union regulating that the fiscal deficit must not be higher than three percent of GDP, Sanader said expressing his confidence that these trends would be maintained until the end of this year.
Sanader added that the external debt had been cut by 650 million euros over the past 15 months. Pressure on the rise of interest rates has been lessened with a rise in the private sector which is seen as a generator of the economic growth.
Finance Minister Ivan Suker said that the reduction of the deficit meant that the budget would receive an additional 485 million kuna.
Under the revision, budgetary revenue would rise by 899 million kuna to 94.89 billion kuna, up 7.3 per cent from last year, while expenditure would rise by 413 million kuna to 99.2 billion kuna,
(1EUR = 7.25 kuna)